2016 (11) TMI 177 - AT - Customs

Penalty - Evasion of duty - Held that - when the breach of law is patent from record, penalty of ₹ 4,50,000/- (Rupees four lakh fifty thousand only) imposed on the appellant under section 112(a) of the Customs Act, 1962 appears to be reasonable and there shall be no interference by the Tribunal - Section 114AA is applicable when documents are falsified with conscious knowledge to cause evasion. In this case, appellant s questionable modus operandi and oblique motive demonstrated its involvement in causing evasion - On the basis of evidence, material facts and attendant circumstances, it is considered proper that any leniency in reduction of penalty will be a bonus to breach of law and that shall be an inspiration to the perpetrator of offence - Appeal dismissed.

Summary

Issues:
Levy of penalty under Section 112(a) and Section 114AA of the Customs Act, 1962 based on the appellant's role in the import chain and alleged evasion of duty.

Analysis:
The appellant contended that despite being part of the import chain, they had no role in causing duty evasion, challenging the penalty of ?4,50,000 under Sections 112(a) and 114AA of the Customs Act, 1962 as unjustified. On the contrary, the Revenue argued that evidence of forged documents and subterfuge through email correspondence implicated the appellant in facilitating the importer and Customs House Agent (CHA) in the commission of the offense. The Revenue supported the penalty imposed by the Learned Commissioner (Appeals) citing the gravity of the offense.

The authorities below found that the appellant played a crucial role linking the importer and CHA, with evidence of mis-declaration of goods in documents like the invoice and packing list. The discrepancy in the description of goods, undervaluation, and unreliable transaction value pointed towards the appellant's involvement in the offense. The importer's statement alleging forged documents by the appellant further incriminated them, along with recovered emails demonstrating the appellant's role in guiding the importer to commit fraud.

The Tribunal concluded that the evidence established the appellant's abetment in causing duty evasion and breach of law under Section 112(a) of the Customs Act, 1962. The appellant's conscious involvement in the offense, as evidenced by their knowledge of the goods and impact on import duty, justified the penalty imposed under this section. Additionally, the appellant's conduct and modus operandi indicated their conscious approach to defrauding customs, leading to the penalty under Section 114AA.

The Tribunal upheld the penalties under both sections independently, emphasizing that leniency would encourage further breaches of law. Citing the Supreme Court's precedent, the Tribunal deemed no reduction in penalties appropriate. Therefore, the appeal was dismissed in its entirety, affirming the penalties imposed on the appellant.

In conclusion, the judgment upheld the penalties under Sections 112(a) and 114AA of the Customs Act, 1962, based on the appellant's active involvement in facilitating duty evasion and breach of law. The decision highlighted the seriousness of the offense and the need to deter such conduct by imposing and upholding substantial penalties.